NITI Aayog Report on Economy: NITI Aayog’s report shows that India’s trade is certainly growing, but it is not balanced. In the quarter January–March 2026, total trade reached $1.84 trillion and registered a growth of 5.4%, but the thing to note here is that imports (6.5%) are growing faster than exports (4.2%). This means that India’s external dependence is still high and domestic production is not growing as fast in the global market.

Goods trade under pressure, service sector becomes support

Data from the report show that exports of merchandise declined by 2.8% to $112 billion, while imports increased by 11.9% to $195.5 billion. This is a direct indication that the manufacturing sector is still under pressure, but the service sector, especially IT and digital services, has taken over the situation. Service exports increased by 9% to $111 billion and generated a surplus of $60.4 billion. This surplus is keeping India’s overall trade deficit under control.

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Trade deficit under control but risks continue

Overall, if goods and services are included, there was a loss of 23.15 billion dollars, which is the second lowest of the year. The graphs of the report also show that the deficit has reduced somewhat in the second half of the year, but this improvement cannot be considered permanent, because it is largely dependent on the service sector.

What does the export-import pattern say?

According to the report, sectors like electrical machinery, mineral fuels and nuclear reactors are leading in India’s exports. Iron-steel (18.4%) and vehicles (14.2%) showed good growth. At the same time, there was a decline in gems and jewelery which is a sign of weak global demand.

The biggest jump in imports came in the categories related to gold and silver (82%) while there was a decline in mineral fuels (-11%) and iron-steel (-16.8%). This means that the pattern of domestic consumption and investment is also changing.

Trade Partners- Connected to new countries but dependence does not end

This point is important in the report that India is now gradually expanding its business to different countries.

The export share of top 10 countries has decreased to 50%. At the same time, concentration in imports has also reduced, but the ground reality is that imports from China and Russia are still increasing. Dependence on China remains a big risk, especially in the manufacturing and pharma sectors.

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Service sector is continuously gaining strength

• India will become the world’s 8th largest services exporter in 2025.
• Service exports to increase almost 3 times between 2015 and 2025
• Growth rate was 10.3% (more than global 6.6%)

An important indication of the report is that now India’s service exports are no longer dependent only on America.

• North America’s share decreased
• Europe’s share increased
• This diversity gives stability in the long run.

Pharma Sector- Strength in Volume! weakness in value

The main focus of the report is on pharma and this is where the biggest contradiction is visible. India supplies cheap generic medicines to the world.

• Africa – 50%
• America – 40%
• UK – 25% requirement

But India’s share in high-value segments like biologics, vaccines, advanced therapies is very low (about 0.6%). Other than this…

• 65% dependence on China for API
• R&D expenditure only 7% (global 15–20%)
• That means India is big in volume but lags behind in technology and value.

Global trends – prices and policy pressures

The report shows that the prices of crude oil, coal and precious metals continue to fluctuate.

• Gold and silver prices increased
• Energy prices also under pressure
• Also, steps like US-China trade movement, WTO uncertainty and new FTA show that the global trade environment is changing rapidly.

According to experts, if India wants to become strong in trade in the coming times, then increasing exports alone will not suffice. Big bets will have to be made on high-value products, technology and R&D.

Customs duty has been a big problem for a long time for those doing import-export business. Different slabs, confusing classifications and endless disputes have made the system a puzzle. But now there are full indications of this picture changing in the Union Budget 2026. Finance Minister Nirmala Sitharaman will present the budget on 1 February 2026 and there may be a big announcement to simplify the customs duty structure. Currently, there are more than 8 slabs of customs duty in India, which also include additional charges like IGST and cess. The government plans to reduce these slabs to only 5 or 6, so that compliance becomes easier and confusion is reduced. Its biggest benefit will be reduction in disputes and court cases. More than 75,000 customs cases were pending till December 2024, in which about ₹24,000 crore is stuck. The duty structure between SEZ and Domestic Tariff Area may also be rationalized in Budget 2026. There will also be focus on reforms like removing unnecessary exemptions, fixing inverted duty structure, paperless customs process and amnesty scheme. If these changes are implemented, sectors like electronics, EVs, pharma, textiles, gems & jewellery, renewable energy and MSMEs will get direct benefits. Overall, the government wants to make customs simple, transparent and business-friendly.

After Mexico’s decision to increase the tariff on some Indian products by 50 percent, the Indian government has adopted a tough stance. The government has said that it reserves the right to take ‘necessary decisions’ to protect the interests of Indian exporters. A government official said on Saturday, ‘India reserves the right to take necessary steps to protect the interests of Indian exporters, and will continue to try to find a solution through negotiations.’

Beneficial solution for both countries

According to the Indian official, India had started talks with Mexico at the time of the initial proposal of this bill. The Commerce Department is in touch with the Mexican Economy Ministry to find a solution that is beneficial to both countries in line with global trade rules. In this regard, a high level meeting has been held between Commerce Secretary Rajesh Aggarwal and Mexico’s Deputy Economy Minister Luis Rosendo. There are plans for further talks also.

The Indian government said that unilaterally increasing the Most Favored National (MFN) tariff without prior consultation is against the security of cooperative economic relations between the two countries. It also does not match the principles of transparency and predictability of the multilateral trading system.

Tariff will be applicable on Asian countries from next year

This tariff decision of Mexico has been taken to protect its domestic industry and producers. These new tariffs will be applicable from January 1, 2026. This tariff will be imposed on products from countries with which Mexico does not have a free trade agreement (FTA), such as India, China, South Korea, Thailand and Indonesia.

Affected products include auto parts, light vehicles, clothing, plastics, steel, home appliances, toys, textiles, furniture, shoes, leather goods, paper, cardboard, motorcycles, aluminum, trailers, glass, soap, perfumes and cosmetics.

Big impact on Indian automobile exports

Mexico is India’s third largest car export market. From here India exports cars and parts worth about 1 billion dollars (about Rs 8,500 crore). Major companies like Volkswagen, Hyundai, Nissan and Maruti Suzuki will be affected. Tariff on cars will increase from 20 percent to 50 percent.

The Indian official said, ‘India values ​​its partnership with Mexico and stands ready to work together to create a stable and balanced trade environment for the benefit of businesses and consumers of both countries.’

Preparation of new plan between the two countries

India and Mexico are also planning to start talks for a free trade agreement. Experts believe that due to FTA, Indian companies can get exemption from these tariffs. This decision has come at a time when there is a tariff war going on in global trade. This step by Mexico is to strengthen domestic industry and increase income, but it may increase prices.